Correlation Between Lighthouse Capital and Clicks
Can any of the company-specific risk be diversified away by investing in both Lighthouse Capital and Clicks at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Lighthouse Capital and Clicks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lighthouse Capital and Clicks, you can compare the effects of market volatilities on Lighthouse Capital and Clicks and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Lighthouse Capital with a short position of Clicks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lighthouse Capital and Clicks.
Diversification Opportunities for Lighthouse Capital and Clicks
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lighthouse and Clicks is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Lighthouse Capital and Clicks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clicks and Lighthouse Capital is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Lighthouse Capital are associated (or correlated) with Clicks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clicks has no effect on the direction of Lighthouse Capital i.e., Lighthouse Capital and Clicks go up and down completely randomly.
Pair Corralation between Lighthouse Capital and Clicks
Assuming the 90 days trading horizon Lighthouse Capital is expected to under-perform the Clicks. But the stock apears to be less risky and, when comparing its historical volatility, Lighthouse Capital is 1.42 times less risky than Clicks. The stock trades about -0.16 of its potential returns per unit of risk. The Clicks is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,835,700 in Clicks on August 28, 2024 and sell it today you would earn a total of 100,500 from holding Clicks or generate 2.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lighthouse Capital vs. Clicks
Performance |
| Timeline |
| Lighthouse Capital |
| Clicks |
Lighthouse Capital and Clicks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lighthouse Capital and Clicks
The main advantage of trading using opposite Lighthouse Capital and Clicks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lighthouse Capital position performs unexpectedly, Clicks can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Clicks will offset losses from the drop in Clicks' long position.| Lighthouse Capital vs. Centaur Bci Balanced | Lighthouse Capital vs. Sabvest Capital | Lighthouse Capital vs. Growthpoint Properties | Lighthouse Capital vs. Bowler Metcalf |
| Clicks vs. Centaur Bci Balanced | Clicks vs. Sabvest Capital | Clicks vs. Growthpoint Properties | Clicks vs. Bowler Metcalf |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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